In a recent decision, the Fourth Court of Appeals at long last addressed these questions head on in Straehla v. AI. Global Services, LLC and fashioned a presumption that both members and managers of limited liability companies do owe fiduciary duties of care, loyalty, and good faith, to the company. While this presumption would align Texas law with that of jurisdictions such as Delaware, the Texas Supreme Court may hand down the final word.
The uncertainty on these questions has grown from the Texas Business Organizations Code. While the Code does not expressly impose any duties on the members or managers of a limited liability company, it does make a related, cryptic statement:
The company agreement of a limited liability company may expand or restrict any duties, including fiduciary duties, and related liabilities that a member, manager, officer, or other person has to the company or to a member or manager of the company. TEX. BUS. ORG. CODE 101.401.
Excerpted from The Houston Lawyer. To read the full article, click here. (See Page 44)